Flights of Fancy

Commercial airlines may be struggling, but private air charters are riding high

March, 2004

It is 11:15 a.m., and Mahea Mitchell is idly moving about her house in Kona, gathering last-minute items and stuffing them into her suitcase. “What time does our flight leave for Maui, honey?” asks her husband, freshly showered, but not yet ready to head out. “In 45 minutes,” she responds. “But no worry, honey, we get plenty time.”

It may sound like a made-up scenario (when was the last time travelers could show up at the airport a half-hour before their flights and not sweat bullets?), but it isn’t. In May 2003, Kona-based Mokulele Flight Services, formerly an air-tour company, began on-demand flight services between Kona and Kahului, touting convenience, service and efficiency. According to Mokulele President Kawehi Inaba, locals have responded favorably.

“We have a maximum check-in time of half an hour, and most times, it’s even faster. Our passengers love that because it’s quicker and more convenient than the major carriers,” says Inaba. “Our interisland service is really taking off. It’s quadrupled since we started last May, and we’re actually in the process of buying another plane to meet the demand.”

Mokulele flies an average of four chartered, unscheduled flights per day, with fares ranging from $61 – $83 each way. Currently, the company only offers the Maui-Kona route, although travelers may charter a flight anywhere within Hawaii for a prearranged fee, and Inaba expects to add more routes over the next few months.

“There’s been such a high demand lately for chartered air service in Hawaii, and it’s a result of a combination of factors,” says Inaba. “There’s been a lack of available flights since the major carriers scaled down, airline rates have drastically increased, and, most importantly, the inconvenience of flying. With all the extra security and terrorist threats, people are spending a lot of time in lines at the airport.”

Indeed, the increasing popularity of chartered flights began post-9/11, after increased security measures prompted long and unwieldy waits at airports. The amount of travelers using chartered flight services to Hawaii nearly tripled since the events of Sept. 11. In 2001, from January to November, passengers filled 13,582 charter seats to the Islands, as compared with 35,780 during the same period last year, according to the Department of Business, Economic Development and Tourism. Local private operators say the Mainland trend of chartering flights is beginning to catch on locally.

Craig Gomez, president of Honolulu-based Pacific Luxury Air, says U.S. Mainland travelers have thus far been fueling his air-charter business, which opened last February and earned roughly $800,000 in gross annual sales, but he sees a niche for interisland charter services.

By July of this year, Gomez hopes to introduce two to three new charter planes, capable of carrying 30 passengers each, which will service interisland travelers. He plans to sell monthly passes for $2,000, good for about 20 round-trip flights and transferable between three people from the same organization. “We’re trying to target the business community. All you have to fly is more than two times a week, and it’ll save you money,” he says. “We’re also targeting tour groups, because we’re hearing from them that it’s difficult for tourists sometimes to make their connecting flights.”

In order to be competitive in the growing field of worldwide private air charters, Gomez keeps his profit margin to a slim 2 percent, although he may be selling himself short. According to Joseph Sandlin, manager of Kauai-based Your Jet 2!, air charter companies typically have heftier margins of around 12 percent to 18 percent.

Sandlin is taking a reverse approach – he used to fly charters interisland, but in December 2002, switched to servicing the Mainland and international markets. As a result, his gross annual sales jumped from $185,000 to $2.3 million. “We had an airplane that would rent for $500 per hour, and now it rents for $4,000 per hour, so that’s the route we went,” says Sandlin, who estimates chartered roundtrip flights to the Mainland to run between $48,000 to $62,000. “But that’s not to say that the demand isn’t there for interisland charter services. The demand is definitely there. I’d say there’s more than enough room in this market to accommodate both interisland and worldwide charter services.”